Trader Michael Mozian works on the floor of the New York Stock Exchange Wednesday, Jan. 30, 2013. Stocks are falling after the government revealed that economic growth shrank in the final quarter of 2012, the first time that's happened in more than three years. (AP Photo/Richard Drew)
Wednesday, January 30, 2013 9:47 pm
Asia stocks fall after US shows 4Q contraction
By PAMELA SAMPSONAP Business Writer
The U.S. economy shrank in the fourth quarter for the first time since mid-2009, hurt by big cuts in defense spending, falling exports and sluggish growth in company stockpiles, the government reported Wednesday. That put the brakes on a Wall Street rally that had pushed the Dow to near-record highs.
"The market has been looking for any excuse to pull back after such an epic month and has taken this news as the main lead for the day," said Evan Lucas of IG Markets in Melbourne in an email commentary.
The Nikkei 225 in Tokyo fell 0.5 percent to 11,063.90 after the government reported lower-than-expected growth in December's industrial production. Output climbed a seasonally adjusted 2.5 percent from November but most analysts had forecast an improvement of more than 4 percent.
Hong Kong's Hang Seng fell 0.5 percent to 23,716.47. South Korea's Kospi shed 0.3 percent to 1,958.66. Australia's S&P/ASX 200 fell 0.5 percent to 4,873. Benchmarks in Taiwan and Malaysia fell. Mainland China was mixed. The Philippines rose.
In a statement released after a two-day policy meeting, the U.S. Federal Reserve acknowledged that the economy is still struggling to regain momentum. The central bank said that growth had "paused in recent months," and while it was taking no new action, it would keep buying $85 billion of bonds a month.
With the Fed meeting behind them, traders and investors will now turn their focus back to company earnings and Friday's nonfarm employment report.
The Dow closed down 0.3 percent at 13,910.42 on Wednesday after the government reported that the economy shrank an annualized 0.1 percent in the October-December quarter of 2012. It grew 3.1 percent the July-September quarter. The Standard & Poor's 500 fell 0.4 percent to 1,501.96. The Nasdaq composite index fell 0.4 percent to 3,142.31
Benchmark oil for March delivery was up 5 cents to $97.99 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 37 cents to finish at $97.94 per barrel on the New York Mercantile Exchange
In currencies, the euro slipped slightly to $1.3566 from $1.3567 late Wednesday in New York. The dollar fell to 91.05 yen from 91.20 yen.
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